Key Affordable Care Act architect tangled in his conveniently changing story.
When a three-judge DC Circuit Court panel earlier this week agreed with the plaintiffs in Halbig v Sebelius, the most potent legal challenge to Obamacare, the law's supporters went ballistic. The lawsuit challenged the legality of the subsidies that the administration was handing out through federal exchanges in 34 states. It argued that these subsidies were illegal because Obamacare had explicitly limited them to state-run exchanges.
The New Republic's Brian Beutler wrote that the judges had validated a claim that even the "people advancing it realize is false." University of Chicago health care expert Harold Pollack denounced the ruling as "judicial activism" that ignored the plain intent of Congress.
Above all, there was MIT economist Jonathan Gruber, one of the key architect's of the law whom the administration paid $400,000 in consultation fees. He had previously claimed the plaintiff's theory was based on a "screwy interpretation of the law."
And when the ruling came last week, he went on MSNBC's Chris Matthews to flesh that out. Barring the feds from handing subsidies, he explained, would mean that "99% of the people would no longer be able to afford insurance," something that would gut Obamacare's individual mandate. "Why would Congress set up the mandate and go through all that political battle to allow it to be destroyed?" he asked. "It`s just simply a typo, and it`s really criminal that this has even made it as far as it has."
But Gruber was singing a very different tune in a 2012 speech before Halbig was filed. In a video that surfaced Thursday night, Gruber noted:
What's important to remember politically about this is if you're a state and you don't set up an exchange, that means your citizens don't get their tax credits… I hope that that's a blatant enough political reality that states will get their act together and realize there are billions of dollars at stake here in setting up these exchanges.
In other words, Congress did mean to use the subsidies to overcome state resistance and pressure them to set up their own exchanges. That is precisely what the plaintiffs in Halbig asserted. Of course, Obamacare's supporters didn't anticipate that the backlash against the law would be so intense that 34 states would actually decline the subsidies, almost as an act of civil disobedience.
On Friday morning, an embarrassed Gruber insisted to The New Republic's Jonathan Cohn, "I honestly don't remember why I said that… I was speaking off-the-cuff. It was just a mistake."
But a second speech, this time in the form of audio, surfaced this morning in which he makes the same claims before the Jewish Community Center of San Francisco at around the same time. In it, Gruber actively acknowledges that should if states revolt en masse, they'd bring down the law. But, he said, that he had enough faith in democracy to believe that even the states that didn't like Obamacare would eventually succumb to the "ultimate threat" that "if your governor doesn't set up an exchange, you are losing hundreds of millions of dollars in tax credits to be delivered to your citizens."
Gruber would like everyone to ignore, not just the plain text of a law that he had a major hand in crafting, but also the plain meaning of his own words explaining why the law was written the way it was – not once, but at least twice.
Who is being "screwy" and "really criminal" here?
Shikha Dalmia, a former Detroit News editorial writer, is a Reason Foundation senior analyst.
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One of the big questions out of the IRS targeting scandal is this: How can an agency that engaged in such political misconduct be trusted to implement ObamaCare? This week’s Halbig v. Burwell ruling reminded us of the answer. It can’t.Tyrannizing you with your money.
The D.C. Circuit Court of Appeals ruled in Halbig that the administration had illegally provided ObamaCare subsidies in 36 insurance exchanges run by the federal government. Yet it wasn’t the “administration” as a whole that issued the lawless subsidy gift. It was the administration acting through its new, favorite enforcer: the IRS.
And it was entirely political. Democrats needed those subsidies. The party had assumed that dangling subsidies before the states would induce them to set up exchanges. When dozens instead refused, the White House was faced with the prospect that citizens in 36 states—two-thirds of the country—would be exposed to the full cost of ObamaCare’s overpriced insurance. The backlash would have been horrific, potentially forcing Democrats to reopen the law, or even costing President Obama re-election.
The White House viewed it as imperative, therefore, that IRS bureaucrats ignore the law’s text and come up with a politically helpful rule. The evidence shows that career officials at the IRS did indeed do as Treasury Department and Health and Human Services Department officials told them. This, despite the fact that the IRS is supposed to be insulated from political meddling.
We know this thanks to a largely overlooked joint investigation and February report by the House Oversight and Ways and Means committees into the history of the IRS subsidy rule. We know that in the late summer of 2010, after ObamaCare was signed into law, the IRS assembled a working group—made up of career IRS and Treasury employees—to develop regulations around ObamaCare subsidies. And we know that this working group initially decided to follow the text of the law. An early draft of its rule about subsidies explained that they were for “Exchanges established by the State.”
Yet in March 2011, Emily McMahon, the acting assistant secretary for tax policy at the Treasury Department (a political hire), saw a news article that noted a growing legal focus on the meaning of that text. She forwarded it to the working group, which in turn decided to elevate the issue—according to Congress’s report—to “senior IRS and Treasury officials.” The office of the IRS chief counsel—one of two positions appointed by the president—drafted a memo telling the group that it should read the text to mean that everyone, in every exchange, got subsidies. At some point between March 10 and March 15, 2011, the reference to “Exchanges established by the State” disappeared from the draft rule.
Emails viewed by congressional investigators nonetheless showed that Treasury and the IRS remained worried they were breaking the law. An email exchange between Treasury employees in the spring of 2011 expressed concern that they had no statutory authority to deem a federally run exchange the equivalent of a state-run exchange.
Yet rather than engage in a basic legal analysis—a core duty of an agency charged with tax laws—the IRS instead set about obtaining cover for its predetermined political goal.
Let's be sure to remember that this law and all it's various changes and interations since it was passed is 100% the product of Democrats. Not one Republican voted for this mess, there is not one Republican contribution to this law, it's solely the work of the Democrats. Also, the main architect Jonathan Gruber is supposedly a professor at Harvard who was paid $400,000 for his work in drafting this legislation. How would you like to be paying the tuition for your child's education at a school where a full-time professor is able to moonlight a job that pays him like that?? On top on everything else he's a garden variety Democrat liar.
